Green Building

As Green Building Matures, Business Opportunities Abound

Nowhere is the need for environmental stewardship more critical than in the building industry. U.S. buildings consume approximately 65 percent of the nation’s electricity demand, 30 to 40 percent of wood products, and 25 percent of total water consumption.  They generate 30 percent of the nation’s solid municipal waste stream and 30 percent of greenhouse gas emissions. Clearly, it is among the most resource-consuming industries.

As our population continues to expand, building demands grow exponentially.  Growth within the U.S. has translated into well over 100 million housing units (63 percent of which are single-family detached units), a figure that increases by almost 2 million each year. The average house size is between 2,250 and 2,500 square feet, providing almost 800 square feet per inhabitant. Commercial buildings are growing in number and size at a similar pace.

Fortunately, product manufacturers, building professionals, consumers, and even regulators and legislators are recognizing the importance of sustainability in the building context, and the green building movement is successfully penetrating the mainstream building industry. 

Consumer Demand Explodes

Exponential growth in consumer demand has created a green building market with more than $10 billion in annual sales, according to the U.S. Green Building Council. This transformation can be attributed to growing consumer awareness about issues such as environmentally appropriate building materials, indoor air quality, renewable energy and even green mortgages. As U.S. adults shift towards making purchasing decisions based on core values, namely personal health and environmental issues, their interest in purchasing green-certified, non-toxic, organic, and natural products increases.  And, consumers are recognizing that not only is possible, but also cost-effective, to blend their aesthetic preferences with the desire to do something good for the environment. 

Supply-Side Lingers

Despite this explosion demand, annual surveys conducted by Professional Builder magazine (www.housingzone.com) demonstrate that year after year the supply side of the equation has been slow to respond. For example, the studies show that both builders and product manufacturers have consistently underestimated the amount that consumers will spend on green features and designs, as well as the importance of green building issues to homebuyers.

The number of visionary builders and product manufacturers is increasing substantially, and the benefits of green building— that a healthy building is a good home, bigger does not necessarily mean better, and the built environment can be holistically integrated into the natural one—are becoming fundamentals of design and construction.

Pioneering product manufacturers, like Atlanta-based Interface Inc. and Zeeland, Mich.-based Herman Miller Inc., are leading the quest to design and manufacture “closed-loop systems,” having no wa te and utilizing renewable or recyclable raw materials and energy. These companies are reaching beyond green products (which are free of toxins, have a positive short-term effect on the environment, and are resource efficient) into the more complex realm of sustainability. To achieve sustainability, the companies are attempting to fully integrate design and process, creating not just a line of products, but an entire system that is regenerative, returning as many resources as it takes from nature and society. 

Green is Profitable

Though these companies may go “green” based on a desire to become better stewards, the greater motivation often is the bottom line. From a business standpoint, there is money to be made in sustainability, whether in the form of reduced monthly energy bills for a commercial business or in increased market share for a manufacturer. Green features are selling products while preserving the planet — a blending of values that benefits everyone

Building industry companies large and small are becoming aware of the financial and branding benefits of pursuing a sustainable agenda. These corporations are doing what we believe all companies must do in order to remain competitive: they are accepting stewardship roles while positioning themselves to capitalize on rising energy prices and resource-efficient products. That this strategy may help to preclude future run-ins with regulators and legislators is icing on the cake.

Smaller companies are also responding to consumer demand for sustainable offerings, introducing beautiful, sophisticated green building products. These small companies are inserting themselves into a vast array of niches within the green building space, creating products ranging from optimized solar energy systems with components that “talk” via electronic “buses” to soybean-based spray-on insulation. Through innovation and market responsiveness, these smaller companies are helping to make green products affordable and widely available. In so doing, they are disproving the old myth that green products are ugly, expensive and inaccessible.   

Taking the Sustainable Path

It is clear that the green building industry is moving toward maturity. We can expect to see an even greater proliferation in the demand and supply of green products and technology. 

Look for an increase in affordable green technologies that help mitigate energy bills and resource use (for example, solar hot water systems that dramatically reduce the amount of conventional energy needed to produce hot water).  Whole-building water and air filtration systems are also becoming more popular, as are sustainably harvested, reclaimed, or engineered timber products.   And, with the linkages between physical ailments like asthma, headaches, and ADD with products that off-gas in the home, watch for products that enhance indoor environment quality, from alternative building materials like insulated concrete forms to organic fabrics to natural, earth-based plasters. 

Sustainable design will likely continue to gain attention in the building realm.  Structures with smaller footprints and a more flexible floor plan (in which spaces can be used for multiple purposes) are becoming a more desirable choice than those with large areas that serve only one purpose (for example, houses with formal dining rooms that are only used once or twice each year).  

The Need for Green

Sustainable systems facilitate and encourage life.  Similarly, sustainable spaces are healthy and reflect our core values.  If we choose to surround ourselves with synthetic materials and toxic products, we are choosing a reality that may result in sickness, lack of productivity, and a low quality of life.  If, instead, we choose to surround ourselves with sustainably harvested products, materials that do not off-gas, and environmentally appropriate technologies and designs, we create an enhanced life that is healthier, safer, and beneficial for the environment. 

Ron Jones and Sara Gutterman are founders of Green Builder, a development and consulting firm in the sustainable growth space. For more information, visit www.thegreenbuilder.com , or contact Gutterman at sara@thegreenbuilder.com

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